Acacia Mining : Results for the 6 months ended 30 June 2018

20 Jul 2018

'We succeeded in delivering another strong operational performance during the first half, producing 254,759 ounces of gold across the Group at all-in sustaining costs ('AISC') of US$945 per ounce,' said Peter Geleta, Interim CEO of Acacia. 'The changes we made to the business in late 2017 have delivered the desired results, helping to return the Group to free cash generation for the first time since Q4 2016 and we are on track to achieve the top end of our production guidance range of 435,000-475,000 ounces for 2018 at an AISC of US$935-985 per ounce. Following the stability we have brought to the business during the last six months, our priority remains on optimising performance across all areas of our operations as we manage through the current uncertainty in the operating environment and the on-going disputes with the Government of Tanzania. By continuing to be resilient, managing our costs and working to our mine plans, we are addressing what we can control and will look to deliver value for all of our stakeholders.'

Operational Highlights

• Regrettably, at North Mara, an operator for one of our contractors had a fatal vehicle-related accident during the period
• H1 gold production of 254,759 ounces, 41% lower than H1 2017, with gold sales of 251,045 ounces being in line with production
• H1 AISC¹ of US$945 per ounce sold, 6% above H1 2017, but tracking below the mid-point of the full year guidance range
• Q2 gold production of 133,778 ounces, 36% lower than Q2 2017, but 11% above Q1 2018
• Q2 gold sales of 134,090 ounces, 5% higher than Q2 2017, and in line with gold production
• Q2 AISC1 of US$918 per ounce sold, 10% above Q2 2017, but 6% lower than Q1 2018

Financial Highlights

• H1 Revenue of US$333.4 million, 15% lower than H1 2017
• H1 EBITDA¹ of US$133.6 million, 17% down from H1 2017 and adjusted EBITDA¹ of US$91.6 million 45% lower than H1 2017
• H1 Net earnings of US$30.9 million (US7.5 cents per share), 51% down from US$62.5 million in H1 2017, impacted by a US$24.2 million impairment at Nyanzaga, with adjusted net earnings of US$13.5 million (US3.3 cents per share), 79% lower than H1 2017
• Post period end, conditional agreement with OreCorp Limited, operator of the Nyanzaga Project, for them to take full ownership of the project in return for total consideration of US$10 million and a US$15 million capped net smelter royalty
• Cash generated from operating activities in H1 2018 of US$58.9 million, was US$57.6 million higher than H1 2017
• Generated US$14 million of free cash flow in Q2 2018 due to strong operational performance
• Cash balance rose 49% during H1 2018 to US$120.1 million due to a non-core royalty sale and the strong operational performance
• Net cash¹ of US$63.3 million, increased by US$53.8 million from the end of 2017

Results Conference Call

Acacia Mining plc will host a presentation for analysts and investors on Friday 20th July 2018.